Anticipated Impact of Global Minimum Tax on Major Vietnamese Corporations

Companies engaged in various international projects attended a meeting organized by the National Assembly (NA) on Friday to discuss the implementation of the global minimum tax. The purpose of the global minimum tax is to make it more difficult for multinational corporations to evade taxes.

As per Reuters, these companies will be required to pay a 15% tax rate on their worldwide profits, regardless of where the profits are generated. The minimum tax rate will be applicable to companies with a turnover exceeding 750 million euros (US$800.6 million). As of June, Vietnam had a total of 1,654 operational projects abroad, with a combined investment of over $22.1 billion.

If the global minimum tax is implemented in 2024, six major companies will be subject to this tax, including: Vietcombank (lender), MobiFone (mobile carrier), Vietjet (low-cost airline), Viettel (military-run telecoms group), Hoa Phat Group (steel firm), and Petrolimex (fuel importer and distributor). This measure aims to prevent these companies from being taxed by a third country in 2025.

Minister of Finance Ho Duc Phoc clarified that the global minimum tax is not an international treaty or a binding commitment for all countries. However, the government stated that even though Vietnam does not impose this tax, it must still acknowledge other countries’ adoption of the global minimum tax. This means that those countries have the right to levy additional taxes on Vietnamese companies that are entitled to lower tax rates than the 15% threshold.

Reuters reported that nearly 140 countries agreed to implement a plan by the Organization for Economic Co-operation and Development in 2021, which includes applying a 15% minimum tax rate on multinational corporations and imposing an additional tax on profits earned in countries with lower tax rates.